Mark Penn’s Stagwell combines 8 agencies into a new ad-buying network — its first big bet to take on ad giants like WPP
Days after shareholders approved the merger of ad agency networks MDC Partners and Stagwell Group, the newly-formed ad holding company Stagwell, Inc. announced its first major realignment.
The company will combine eight agencies focused on ad-buying, content production and business-to-business marketing to form Stagwell Media Network.
Stagwell plans to use the combined services of Assembly, ForwardPMX, Media Kitchen, MMI, Grason, Gale, Multiview, and Locaria to punch above its weight when competing with larger rivals such as WPP, Omnicom and Publicis. The network will combine forces to pitch for accounts that would be too big for its individual agencies to win on their own, said ForwardPMX CEO James Townsend, who will also serve as CEO of Stagwell Media.
The agencies will continue to operate as separate brands.
Brad Simms, CEO of Assembly and Gale, will be global chief product officer, leading the new network alongside Townsend and Stagwell Chief Media Officer Deirdre McGlashan.
The launch came in response to advertisers’ increased demands to have a range of services in one place so they can avoid hiring several different agencies, said Townsend. The larger Stagwell also tries to facilitate cross-agency collaboration by organizing profit-and-loss statements around individual clients like Nike rather than by agency or office.
Simms said Stagwell Media hopes to stand out against bigger rivals by emphasizing digital advertising over print and broadcast while also having the scale to participate in events like the annual network upfronts, where billions of dollars in TV and streaming ads are sold.
“We have the capabilities of the traditional networks without the baggage,” he said. “We’re led by the client, not the finance department.”
MDC Partners first reorganized its ad-buying agencies in 2019 after Mark Penn’s Stagwell bought a minority stake and then created three networks led by agencies Anomaly, 72andSunny, and Doner, respectively.
But unlike those other networks, Stagwell Media Group will serve as the larger organization’s “backbone,” since all Stagwell agencies can access its data, media, and tech services, Simms said.
Townsend said Stagwell Media Group, which now employs more than 2,500 people in 15 countries, is on a hiring spree across departments and does not plan to reduce its headcount. He also said the network will be very active in the M&A market over the next six to twelve months, with a focus on rounding out its offering and expanding its presence in Europe, Asia, and the Middle East.
Stagwell CEO Mark Penn said the newly-formed company will report $2.1 billion in annual revenue, putting it just below Havas, the smallest of the “big six” holding companies.
A spokesperson declined to comment on how much of that total comes from the Media Group agencies but said they collectively manage close to $5 billion in annual ad buys.
On August 4, Stagwell Group and MDC Partners reported second quarter organic revenue growth of 33% and 26%.
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